Whistleblower News: Hanford Nuclear Contract Fraud Case Settles06/11/2018
Why Did the Consumer Financial Protection Bureau Fire Us?
The Consumer Financial Protection Bureau is being gutted from the inside out. Created in 2010 after the Great Recession, during which the typical American household lost one-third of its wealth, the bureau was established to put the financial well-being of families ahead of the interests of lobbyists and Wall Street.
On Wednesday, the bureau’s new leadership effectively fired its Consumer Advisory Board, a volunteer body mandated by law that is supposed to advise the bureau, without ever having held a substantive meeting with its members. This sudden move and other recent changes at the bureau, including efforts to loosen rules intended to protect families and businesses, raise the worrisome prospect that the country will once again end up on a path to foreclosed homes, market failures and taxpayer bailouts. read more »
Mexico Could Press Bribery Charges. It Just Hasn’t.
Mexico’s government has enough evidence to charge officials connected to one of the biggest corruption scandals in Latin American history. But it is refusing to bring charges because they might hurt the governing party ahead of presidential elections, according to three people with direct knowledge of the case.
The scandal involves the Brazilian construction giant Odebrecht, which has admitted to paying nearly $800 million in bribes up and down Latin America to secure government contracts in a dozen countries. Fallout from the investigations has touched nearly every nation in the Americas where the company operated, with presidents impeached, officials arrested and national politics upended from Peru to Panama.
But there have been two notable exceptions: Venezuela, an international pariah with an authoritarian government, and Mexico, where two separate federal investigations have stagnated. read more »
The ‘Fiduciary Rule’ May Sound Boring, But Its Collapse Threatens Your Retirement
Among all the financial reforms launched during the Obama administration, the fiduciary rule may have been the most important to ordinary investors. Issued by the Department of Labor in 2016, the rule required brokers working with retirement accounts to put clients’ interests ahead of their own—for example, by recommending an annuity that was better for the client rather than one from a company that paid the broker a bigger commission. The regulation was hailed as an historic win by consumer advocates, and the financial-services industry began remaking many of its products and pay structures to comply.
Now the regulation is all but dead. In March a federal appeals court struck it down, and the Trump administration has not appealed the ruling. Where does that leave retirement investors? The outlook is anything but clear.
In April the Securities and Exchange Commission released its own plan for investor protection. In a proposed rule that runs hundreds of pages, the agency says it wants brokers “to act in the best interest of the retail customer” but adds, “We are not proposing to define ‘best interest’ at this time.” Instead, the agency lists “obligations” of brokers to ensure they don’t place their own interests before those of their clients and says financial companies must “establish, maintain and enforce policies” that are designed to spot and mitigate conflicts. “We don’t know what they mean by ‘best interest,’ ” says Barbara Roper, director of investor protection at the Consumer Federation of America. “And that is a problem they need to fix because this regulation, as drafted, depending on how it’s interpreted, could be anything from the status quo to a significant improvement in investor protection. And if it’s vague, it’s going to be difficult to enforce.” read more »
Hanford whistleblower case settles for $5.5 million in total fines
Eight years ago, Salina Savage took on government contractors who had used a shell company to prevent legitimate businesses from receiving lucrative jobs at the Hanford Nuclear Reservation.
The Richland-based whistleblower’s case finally settled this week, generating more than $5.5 million in fines against the company and a total of $690,000 paid to Savage for alerting the government to the swindle.
“Small-business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but legitimate, small, disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts,” U.S. Attorney Joe Harrington said. read more »